Apple Beats Q1 Revenue and Earnings Estimates Amid China Sales Drop, Shares Dip 3% in Early Trading
February 02 2024 - 8:47AM
IH Market News
The technology behemoth Apple (NASDAQ:AAPL) unveiled its
quarterly outcomes following the market closure on Thursday,
surpassing revenue and earnings expectations for the first quarter,
yet facing a significant downturn in sales within China, one of the
firm’s crucial markets. Apple’s shares are witnessing a 3% decrease
in Friday morning’s trading activities.
- Earnings per share (EPS): $2.18 vs. estimated $2.10
- Revenue: $119.58 billion vs. estimated $117.91 billion
- iPhone revenue: $69.70 billion vs. estimated $67.82
billion
- Mac revenue: $7.78 billion vs. estimated $7.73 billion
- iPad revenue: $7.02 billion vs. estimated $7.33 billion
- Revenue from other products: $11.95 billion vs. estimated
$11.56 billion
- Services revenue: $23.12 billion vs. estimated $23.35
billion
- Gross margin: 45.9% vs. estimated 45.3%
Although Apple exceeded expectations in most aspects, a 13%
decline in sales in China was a point of concern. This market faced
increasing competition from local companies, such as Huawei, and
the decline was partly attributed to the strength of the dollar
against the RMB (Chinese yuan).
Tim Cook, Apple’s CEO, highlighted that this December quarter
had one less week compared to the previous fiscal year’s first
quarter due to Apple’s corporate calendar. He also pointed to the
steady growth of the company’s services business, which saw an 11%
increase during the quarter, reaching $23.11 billion in revenue.
Apple reported having 2.2 billion active devices in use, marking an
increase from the previous year, which is seen as a positive
indicator for the continued growth of the company’s services.
iPhone sales, boosted by the launch of the iPhone 15, grew
nearly 6% to $69.70 billion but slightly fell short of revised
expectations. Mac sales saw a less than 1% increase, recovering
from a tough previous quarter. However, iPad sales continued their
decline, dropping 25% during the quarter due to the absence of a
new model launched in 2023.
Apple’s wearables business, which includes popular items like
AirPods and Apple Watch, also faced challenges, recording an 11%
year-on-year sales decline, amounting to $11.95 billion in revenue.
This decline was attributed to a patent dispute with the medical
device company Masimo, which led to a temporary removal of Apple
Watches from Apple stores in December.
Overall, Apple remains a significant force in the technology
market, reporting a net profit of $33.92 billion for the quarter, a
13% increase from the same period last year. The company also
announced that it spent nearly $27 billion on dividends and share
buybacks during the quarter. While facing challenges in certain
markets, Apple maintains its solid stance and is gearing up to
continue innovating and expanding its services in the upcoming
quarters.
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